At Blue Wealth, we’re all about minimising your risks and seeking the best value opportunities for you. One of our points of difference is the incentives we negotiate for our clients, the most common being a rental guarantee. I’m often asked how a rental guarantee works, so I thought I’d break it down for you. I will also show you how selecting the right property can increase your rent.
A rental guarantee provides security around rental income after a project has been completed. Basically, the developer will pay you a certain amount of rent for either an agreed period of time or until a tenant is found. If the rental guarantee is for 24 months and your first tenant moves out after 12 months you will be covered until another tenant is found, up until the two-year period expires.
Research approved properties are typically tenanted within a month, although minor initial vacancy is normal and does occur. Initial vacancy can be caused by several factors:
- Rental competition
- Prospective tenant’s flexibility moving in
- Owner’s flexibility accepting tenants
The rental guarantee protects against this initial vacancy.
Vacancy is one thing; what about rental income? The table below shows a comparison between the yields achieved by Blue Wealth approved properties and the average yield in that suburb. The figure in the last column shows the annual premium in rent (based on a $500,000 property) a Blue Wealth property achieves.
| Project & Suburb | Suburb Average Yield (%) | Project Average Yield (%) | Difference (%) | $ Difference Per Year |
| Northwood Fitzroy North (Melbourne) |
3.8 | 5 | 31.6 | 5,980 |
| 107 Cambridge Collingwood (Melbourne) |
4.1 | 4.5 | 9.8 | 1,976 |
| VIDA West End (Brisbane) |
4.7 | 5.1 | 8.5 | 2,028 |
| LaVida Newstead (Brisbane) |
4.9 | 5.2 | 6.1 | 1,500 |
These projects all passed the Blue Wealth research model based on their point of difference and value proposition:
- Northwood: approved based on its uninterrupted north-facing aspect of the Merri Creek Reserve
- 107 Cambridge: located in the historic Foy Gibson precinct in Collingwood, retaining its heritage facade
- VIDA: right on the peaceful waterfront of the Brisbane River
- LaVida: located adjacent to the Gasworks urban renewal area and a premium product in the Newstead area
This is just one among the many benefits of investing with Blue Wealth. Our mission is to find the best property investment opportunities in Australia and to minimise your risk. We have a dedicated team who will support you through the entire process, from identifying the best property to taking ownership. The numbers speak for themselves.
